There are many different ways you can provide charitable benefits through estate planning. Planning for charitable distributions is the only way they can occur upon your death because a charity is not an heir under the laws of intestacy. Therefore, if you have charitable intentions, you must carry them out during lifetime by making lifetime gifts or providing for them in your Will or Revocable Trust. I will describe some of the charitable planning available.
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You can leave a specific asset or a specific dollar amount to the charity of your choice. If the dollar amount is significant, you can require the bequest to be treated by the charity as an endowment (where the principal must be kept invested and only the income is used by the charity for the purpose you provide).
You can organize a private foundation either during your lifetime or upon your death in either your Will or revocable trust. A private foundation is flexible and your family members can participate in the management of the foundation and on the selection of the recipients. It can benefit one or more existing charities, it can provide scholarships, it can carry on an exempt charitable activity of its own such as a food pantry or school.
Charitable Lead Trusts
You can create a charitable lead trust either during lifetime or at death. A charitable lead trust is a trust that distributes certain assets to a charity or charities for a term of years and then distributes the remainder of the assets to another family member.
Charitable Remainder Trusts
You can create a charitable remainder trust either during your lifetime or upon your death. A charitable remainder trust is a trust that distributes certain assets to a charity or charities following a term of years or after a life interest reserved to yourself or given to another family member.
Charitable Beneficiary of IRAs/Pension Benefits
It is possible to name a charity or charity or charities to receive the remaining balances in IRAs or Pension accounts or annuities. You should advise me if that is something you are interested in doing.
Remainder Interest in Real Estate
It is also possible to Deed your home or other real estate to a charity and reserve a life estate in the property to yourself or another family member.
Forming a not-for-profit
If you are interested in forming a charity or a not-for-profit club for your organization, it is necessary to first determine what form of entity is most beneficial to carry out your charitable or not-for-profit purpose.
There are several forms acceptable to the Internal Revenue Service. After your entity is organized, it will be necessary to complete any required source documents and complete and file Form 1023- Application for Exempt Status with the IRS to be taxed as a charity or not-for-profit organization.
Completing Form 1023 can be a daunting task, but I am well-versed in the requirements and specificity required on the application so that your application for exempt status will be approved as quickly as possible. I look forward to assisting you.